India's Fab City investment to top $7 billion as focus moves to solar

BENGALURU, India  The Indian government has approved an additional five companies to take part in projects in Fab City, a proposed semiconductor manufacturing location near Hyderabad. This would take the total investment in Fab City to $7 billion, Minister of State for Commerce, Jairam Ramesh said here Monday (Feb. 18), speaking at the two-day India Semiconductor Association summit.

The focus of the latest investments is on solar energy conversion he said but added that the Indian government has many further projects either with in-principle approval or under considerations which could bring further investments to Fab City.

Fab City, set up in 2006 to encourage the genesis of chip manufacturing in India, is now betting big on photovoltaic products. The five latest projects are all focused on the solar energy business and about half of the proposed projects for Fab City are now in the photovoltaic area.

The five projects are the India-based Titan Energy Systems Ltd. proposing an investment of $50 million in solar photovoltaic cells; NanoTech Silicon India with an investment of $2.1 billion to manufacture thin film solar cell fab; India-based XL Telecom & Energy Ltd., which is investing $76.25 million to set up a unit for solar cells and solar modules; KSK Energy Ventures Ltd. (Hyderabad, India) a venture capital fund that plans to set up a unit for solar photovoltaic panels with an investment of $70.25 million; and the Indian subsidiary of the Canada-based Embedded IT Solutions is planning to set up a PCB manufacturing project with an investment of $5 million.

Two earlier Fab City announcements were the $3 billion SemIndia project to create a world-class wafer fab and the Hyderabad-based Solar Semiconductor Ltd. which said it would be investing $1.1 billion over a 10-year period. The first phase is set to cover manufacture of solar cells and solar panels. The second phase is set to focus on solar thin film technology while the third would scale up manufacturing capacity to one gigawatt per annum.

The Indian government has also given an in-principle approval to five other projects worth a further investment of $7 billion. Yet another five proposals, also worth between $6 billion and $7 billion are under active consideration, Ramesh said during the opening of the ISA summit.